What is your view on stock market trading for Tuesday 30-Nov after the volatility that we got to see on Monday?

In fact, you used the right word. The market on 29-Nov was highlighted by the *** bouts of volatility during the day, to the point that the volatility in market was almost nerve wracking. While the Sensex and Nifty managed to close in the positive, the Sensex for example gyrated by nearly 1,300 points before closing 153 points higher.

Even in the midst of the positive close, there are data points that are worrying. Firstly, the VIX or the volatility index stayed close to the 21 mark. That is indicative of a high degree of fear in the market. The bigger surprise was that despite the positive close, the A/D ratio at 5:45 shows clear lack of conviction in the rally. Only Pharma and IT managed to hold up.

Foreign investors net sold Rs.3,332 crore in equities while domestic institutions bought stocks worth Rs.4,611 crore. Even as the domestic funds supported the market on a tough day, the global markets including the Dow, NASDAQ and European markets were all up over 100 bps. The SGX Nifty continues to trade flat to negative in early trades on Tuesday.

There will be 2 challenges for the markets on 30th November. Firstly, the market will have to get a playing field of lower volatility and the breadth of the market has to improve. An important data point for 30-Nov will be the GDP data that will be announced at mid-day for the September 2021 quarter. It will give guidance for GDP recovery post COVID 2.0.